Color ZigZag Indicator For MT5
Table Of Contents:
- Color ZigZag Indicator For MT5
- Trading ideas with the Color ZigZag Indicator For MT5
- Color ZigZag Indicator For MT5 - Buy Entries
- Color ZigZag Indicator For MT5 - Sell Entries
- Color ZigZag Indicator For MT5 - Conclusion
The Color ZigZag Indicator For MT5 draws a nice looking colored zigzag line on the chart. The basis of this indicator is the project FastZZ. Fibonacci Ratios are used to define the colors of the lines.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
The Color ZigZag Indicator For MT5 is the most advanced version of the zigzag indicator. Traders having experience with the ZigZag indicator might become confused by seeing the 4 colors zigzag in this indicator. But each has a distinct function.
Since the market is changing its direction most of the time, it becomes very hard for investors to track the price movement based on the color code of the Color ZigZag indicator. That’s why this indicator is often called the tools for the experts. But in this guide, we will decipher the key function of this classic tool with simple key steps.
You don’t have to memorize the sequential formation of the zigzag lines. Instead of dealing with the chromatic color segment of this indicator, we will break down the things into simple steps. The blue line is going to act as your trending movement phase.
If you spot yellow, green, and red lines in the zigzag indicator, consider it as the retracement or reversal phase. In most cases, you see long yellow lines in the zigzag before the reversal takes place in the market. Knowing about this colored line segment is not enough unless you have a valid trading strategy.
Trading ideas with the Color ZigZag Indicator For MT5
The rookies jump into the Color ZigZag indicator even though they don’t have any valid trading method. Developing the trading strategy should be the key priority of the retail traders. Investors can also use the simulation or the practice platform to curate their trading edge.
After the development phase, you have to backtest the system. Unless it has a win rate of over 68%, you won’t be able to make money by integrating the Color ZigZag indicator. This indicator will allow you to filter the quality trades. And if you manage to get into the detailed use of this indicator, you will be able to determine the potential profit target zone.
Some skilled traders often use the complex combinations of the color lines in the ZigZag color line to determine their potential stop-loss zone. Now let’s discuss how we can use it in our long and short trade setup.
Color ZigZag Indicator For MT5 - Buy Entries
There are many ways by which you can use the Color ZigZag line segment to execute the trade. But keeping the sequence right during extreme volatility is going to be a tough task. The advanced traders often find it hard to filter the trade based on chromatic color formation in the ZigZag line segment.
Instead of going for such a hard process, we will be using a simple technique. Find your buying signal at an important support level. If the trend is bullish, you have to wait for the bearish correction in the price towards the minor support so that you can focus on the tight stop loss.
The bearish correction in the market will be marked by the yellow or the red line. At the end of bearish correction, you should see a blue line segment in the Color ZigZag indicator. The blue line segment should form right at the time when you spot the buying signal. Execute the long trade when all these conditions are filled in the market.
Color ZigZag Indicator For MT5 - Sell Entries
By now you know the complexities level of the Color ZigZag indicator depends on how the traders are using it. For the short trade, we are going to bring more color variations to the table so that we can take advantage of the different phases of the market. At the initial stage, you may get confused with the trade based on the Color ZigZag indicator but soon you will be able to do the right calculation with a stable mind. By now you know, the blue line is the part of the trending movement.
So, as you find the selling point with the help of your trading strategy, you have to wait for the yellow or the red line as a part of the bullish correction. So, the financial blue bar will tell you to take the short trade. But once the trend is established enough, you can take advantage of the green lines also.
At the end of each green line, you get a buying opportunity. This means the green line is now going to act as the potential bullish correction pattern for the instrument. The end of the green line suggests the bulls are exhausted and the sellers are again returning to this market to push the price to a new low.
So, the execution of short trades becomes more frequent. This step is handy for the users who are relying on the day trading or scalping method. But when integrate the Color ZigZag with the scalping system, be careful about the news hours. Getting yourself into the trade right at the time of a news announcement can be very dangerous for your trading career.
Color ZigZag Indicator For MT5 - Conclusion
Every indicator has some pros and cons. The only problem you might face with the Color ZigZag indicator lies with the identification level. You might not be able to find the exact level where the price will hit the dead end the color line in the indicator will get changed.
We do have a very solution to this problem. Most of the time, the color line of this indicator will change when the price hits any support or resistance level. So, having a clear concept of the support and resistance level is a must unless you want to remain confused about the use of the Color ZigZag indicator.
This indicator can be equipped with the scalping trading method, you have to test it vigorously before using it in the real market. Testing the indicator in the demo platform with the help of your existing trading method will let you identify the key problems associated with your trading system and the use of the indicator.
Based on the report, you can revise your strategy and bring positive change in how you take the reading from this classic Color ZigZag indicator. So, test the indicator in the demo platform as it can reduce the risk to a great extent.
